Zacks Industry Outlook Highlights: Simon Property Group, Taubman Centers and
CHICAGO, March 6, 2013
CHICAGO, March 6, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses
the U.S. Real Estate Investment Trusts (REIT), including Simon Property Group
Inc. (NYSE:SPG), Taubman Centers Inc. (NYSE:TCO) and Ventas Inc. (NYSE:VTR).
A synopsis of today's Industry Outlook is presented below. The full article
can be read at
In 2012, most of the sectors in the REIT market performed well and reported
double-digit returns. The standout performance in the industry was that of the
Timber REITs (a total return of 37.05% as measured by the FTSE NAREIT Equity
REITs Index, followed by Industrial (31.28%), Infrastructure (29.91%), Retail
sector (26.74%), Health Care (20.35%), Self-Storage (19.94%), Lodging/Resorts
(12.53%) and Diversified REITs (12.20%). The relatively underperforming sector
was Residential (6.94%).
We are bullish on Simon Property Group Inc. (NYSE:SPG), the largest publicly
traded retail REIT in North America, with assets in almost all retail
distribution channels. Its international presence gives it a more sustainable
long-term growth story than its domestically focused peers. The geographic and
product diversity of this Zacks Rank #2 (Buy) company also insulate it from
market volatility to a great extent and provide a steady source of income.
In addition, Simon Property generally enters into long-term leases with
companies, which insulate it from short-term market swings that have weighed
on other players in the industry. With a favorable supply/demand relationship,
rising earnings estimates, robust growth projections, and a healthy dividend
rise (announced simultaneously with its fourth quarter earnings release),
Simon Property offers an enticing upside potential going forward.
We are also bullish on Taubman Centers Inc. (NYSE:TCO), which owns, develops,
acquires and operates regional and super-regional shopping centers throughout
the U.S. and Asia. This Zacks Rank #2 (Buy) REIT focuses on dominant retail
malls that command the highest average sales productivity in the U.S.,
measured in terms of mall tenants' average sales per square foot.
Furthermore, the shopping centers are located in the most affluent regions of
the country, thereby enabling retailers to target high-end upscale customers
and maximize their profitability. This, in turn, has enabled Taubman to
command relatively premium rents for its portfolio, thereby ensuring steady
top-line growth. In addition, Taubman has one of the strongest balance sheets
in the sector with adequate liquidity. The company has also taken prudent
steps to reduce its operating expenses.
Another stock worth mentioning is Ventas Inc. (NYSE:VTR), a leading healthcare
REIT, primarily engaged in the business of financing, owning and leasing
healthcare related and senior housing facilities.
Being one of the largest healthcare REITs in the U.S., this Zacks Rank #2
(Buy) REIT boasts a significantly diversified portfolio and exposure to nearly
all types of facilities. Also, the healthcare sector is relatively immune to
the downturn in the economy, and provides a steady source of income that
protects the company from short-term market volatility.
We expect the company's strategic move in acquiring Atria and other
opportunities to provide significant upside potential to the stock going
forward. Moreover, we remain encouraged with the recent dividend hike
announcement at Ventas.
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